CryptoCom is the latest exchange to provide proof of reserves amid soaring demand for industry transparency stemming from FTX’s collapse.
The audit found that its customers’ balances for multiple top cryptocurrencies, including Bitcoin and Ethereum, are over 100% backed.
- As the exchange announced on Friday, its proof of reserves featured an audit from Mazars Group – an independent crypto-focused advisory firm that also carried out Binance’s proof of reserves last month.
- The auditing group used “advanced cryptographic procedures” to ensure the availability of customer funds. It compared the assets held on CryptoCom-controlled addresses with customer balances as of December 7, using a live query of an auditor-overseen live query of a production database.
- The results found that BTC and ETH had reserve ratios of 102% and 101% respectively. Meanwhile, top stablecoins including USDC and USDT were respectively backed 102% and 106%.
- Other audited coins with full reserve ratios included XRP, DOGE, SHIB, LINK and MANA. However, the exchange has not provided exact figures for its assets and liabilities.
“Providing audited Proof of Reserves is an important step for the entire industry to increase transparency and begin the process of restoring trust,” said Kris Marszalek, CEO of Crypto.com, in a statement.
- Like Binance, CryptoCom now allows users to confirm that their individual assets remain secure and accessible through both their app and website.
- Proof of reserves is a transparency tool that uses public blockchain data to prove the safety of users’ assets on exchanges. Proper implementation of this system still requires an external auditor to analyze a company’s liabilities to ensure it is entirely solvent.
- This fact has been repeatedly pointed out by Kraken CEO Jesse Powell, who criticized apparent holes in Binance’s proof of reserves earlier this week.
ok, I’ll give you a hint. This is just the easy stuff that says this OBVIOUSLY is not a traditional Proof of Reserves, and should immediately have had actual journalists digging.
Why use collateral value? Why negative balances included? No wallet signing? Who issues BTCB & BBTC? pic.twitter.com/F9u4XJ5WSi
— Jesse Powell (@jespow) December 8, 2022